Mr. Bob Cariglia reports

DEALNET CLOSES FIRST TRANCHE OF SECURED SUBORDINATED DEBENTURES

DealNet Capital Corp. has closed the first tranche of the non-brokered offering of secured subordinated debentures for total gross proceeds of $822,000. The company originally announced its intention to raise up to $1.5-million of the debentures on July 18, 2014, and is continuing toward raising the full amount.

About the debentures

The debentures will mature on the date that is six months from the date of issuance and bear interest at a rate of 15 per cent per year, which shall accrue and be paid on the maturity date. In addition, a 3-per-cent establishment fee will be paid to the holders of the debentures and be due on the maturity date. The company will also issue 575,400 common share purchase warrants to the holders of the debentures so subscribed for. Each warrant will entitle the holder to purchase one common share of the company at 30 cents over a period of 24 months from the date of the debenture issuance.

The debentures and warrants will have a hold period of four months from the date of closing.

The debentures will be indirect secured obligations of the company ranking subordinate to all liabilities except liabilities, which by their terms rank in right of payment equally with or subordinate to the debentures. The debentures will rank pari passu with all subordinate indebtedness issued by the company from time to time to the extent subordinated on the same terms.

The proceeds of the offering will be used to implement management's business plan, which includes acquisitions, business development, corporate marketing initiatives, project specific infrastructure and general working capital purposes. The company will pay a finder's fee equal to 2 per cent in cash and 2 per cent in warrants of the gross amount invested by accredited investors introduced to the company by registered dealers.

We seek Safe Harbor.